In this article, we will take a look at 13 Best AI Stocks to Buy Under $20.

Artificial intelligence has been a major part of investment strategies over the past two years. It’s one of the reasons the overall equity market has rallied to record highs, driven by solid gains in tech-heavyweights. While the S&P 500 is highly diverse, it’s increasingly becoming an AI index, with five companies accounting for about 30% of its weight.

While focus for the longest time has been on tech giants spearheading the AI revolution, Trivariate Research founder Adam Parker insists that investors are rethinking their backup plan. That’s because most counters are trading at historical highs on valuations getting out of hand amid the AI boom.

Questions about whether the AI boom could turn into a bubble underscore the need to diversify into investment plans trading at highly discounted valuations. Mohamed El-Erian, Allianz chief economic advisor, has already called it a ‘rational bubble’.

“At the end of the day, there are just going to be a few winners, a handful of winners, and therefore some of the investment will result in tears,” El-Erian said in an interview with CNBC’s Squawk Box.

On the other hand, a Bank of America Global Fund Managers Survey has identified the AI bubble as the biggest tail risk to markets. The survey, which polled 166 fund managers overseeing assets worth $400 billion, indicates that a third are wary of an AI bubble.

Bank of America strategists have already noted in a report that “positioning shows investors see returns outweighing risks,” around AI stocks. Nevertheless, the risks of AI stock bubbles are not enough to dampen investor sentiment.

“Concerns around an AI bubble have increased, rising to the #1 market tail risk, but not by enough to dampen a more positive equity market outlook overall,” BoA strategists said.

Amid AI bubble uncertainties, there are still stocks trading at a discount amid premium valuation concerns in the overall market. With that in mind, let’s look at the best AI stocks to buy under $20.

Our Methodology

To curate the list of the 13 Best AI Stocks to Buy Under $20, we scanned ETFs and other online sources for companies with significant exposure to artificial intelligence technology. We settled on AI stocks trading for less than $20 (as of October 24) and that are popular among elite hedge funds. Finally, we ranked the stocks in ascending order by the number of hedge funds holding stakes in them in Q2 2025.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).

Best AI Stocks to Buy Under $20

13. Veritone Inc. (NASDAQ:VERI)

Share Price: $6.14

Number of Hedge Fund Holders: 4

Veritone Inc. (NASDAQ:VERI) is one of the best AI stocks to buy under $20. On October 23, analysts at Needham initiated coverage of Veritone Inc. (NASDAQ:VERI) with a ‘Buy’ rating and a $10 price target. The buy rating comes on the heels of strong momentum, with the stock rallying 180% over the past six months.

Consequently, the research firm expects the stock to continue outperforming the overall market, driven by growth in various segments as it pursues targeted market opportunities. The momentum should be driven by growth in the aiWARE, the company’s open AI platform that allows customers to transform unstructured data into structured business outcomes.

Additionally, Needham expects Veritone to benefit from growth in the AI data training market, Public Sector application sales, and aiWARE platform sales across various end markets.

Veritone Inc. (NASDAQ:VERI) is an enterprise AI company that develops software and services to transform unstructured data, such as audio and video, into actionable intelligence. Its core platform, aiWARE, is an AI operating system that orchestrates various AI models to automate tasks and improve efficiency for industries such as media and entertainment, public sector, legal, and talent acquisition.

12. Spectral AI Inc. (NASDAQ:MDAI)

Share Price: $2.22

Number of Hedge Fund Holders: 7

Spectral AI Inc. (NASDAQ:MDAI) is one of the best AI stocks to buy under $20. On October 23, the company announced the pricing of a $7.6 million offering to bolster its balance sheet. The raising of additional capital should help support the expansion and development of the company’s DeepView System.

In the offering, the company is to issue 4 million shares of common stock at $1.90 per share and corresponding warrants at $2.51 per share. The capital injection will help broaden the company’s clinical indications and prepare it for commercial readiness in 2026.

“This financing ensures that we can continue to develop and expand the DeepView System’s clinical indications and prepare for commercial readiness in 2026. We remain fully committed to supporting our current BARDA Project BioShield (PBS) contract, while also advancing our AI-powered technology to broaden our product offerings and deliver innovative solutions to the global medical community,” said J. Michael DiMaio, MD, Chairman of the Board of Spectral AI.

Spectral AI Inc. (NASDAQ:MDAI) is a medical diagnostics company that uses artificial intelligence (AI) and multispectral imaging to assess the healing potential of wounds. The company’s technology helps clinicians make faster and more accurate treatment decisions for patients with burns and diabetic foot ulcers.